ISSN (Print) : 0974-6846

Indian Journal of Science and Technology, Vol 9(27), DOI: 10.17485/ijst/2016/v9i27/97629, July 2016 ISSN (Online) : 0974-5645

Self-Help Group and Socio-Economic Empowerment

of Women in Rural India
R. L. Vinodhini1* and P. Vaijayanthi2
1
School of Management, SASTRA University; Thanjavur - 613401, Tamil Nadu, India; vinodhini@[Link]
2
School of Law, SASTRA University, Thanjavur - 613401, Tamil Nadu, India; vaijayanthi@[Link]

Abstract
Background/Objective: The study focused on confirming the financial and social empowerment status of women ­belonging
to various self-help groups in the country. Self-Help Group (SHG) is a village-based financial intermediary committee usu-
ally composed of 10–20 local women or men. In India, many SHGs are linked to banks for the delivery of micro-credit. Since
literature review confirmed the positive attitudes per se of the self help group women, the financial facilities for sending
their children to school and access to the day-to-day living amenities. It can be concluded that SHG have been successful in
achieving both social & financial empowerment goals. Analysis: The secondary data analysis is made and it also confirms
the steady growth on the membership level as number of self help groups in the country. Findings: Findings on social or-
ganizations have been presented. The key reasons for the success of SHGs are its link with the poor people, its innovative
practices, its capacity to enable people’s participation in development and trust building at different levels between stake-
holders. SHGs also help in the financial status of the households. They have developed self-confidence and independence
among rural women, which in turn increased the livelihood of the rural people.

Keywords: Self-help Group, Women Empowerment

1. Introduction 3. Emergence and Growth of

Self-Help Group (SHG) is a small association of vil-
SHG’s in India
lage people, preferably from the same socio-economic India adopted Bangladesh’s model of SHG after mak-
background. They join together for the purpose of solv- ing changes, primarily with the purpose of reducing the
ing their common problems. The SHG support in the poverty and to empower the rural women. In the early
financial status of its members. The SHG promotes small eighties, Government of India took serious steps in pro-
savings among its members and the savings are kept with moting the apex bank to take care of the financial needs
a bank. Generally, the members in one SHG are restricted of the poor, rural and informal sectors. Then, NABARD
(National Bank for Agriculture and Rural Development)
to 20. Mainly the SHG members are women. The SHG
took initiatives and came out with alternative methods to
helps women in participating in their family affairs as well
fulfill the financial needs of the poor, rural and informal
as in the society.
sectors. NABARD has played a phenomenal role in the
rural development of India1.
2. Purpose of the Study SHG’s have come a long way, since the establishment in
1992. SHGs have made a tremendous progress from a sta-
The purpose of this study is to know the status of SHG tus of 500 groups in 1992 (Titus 2002) to some 16,18,456
in rural India and its impact on socio-economic develop- groups that have taken loans from banks. Through SHG-
ment of women. bank linkage programme 24.25 million poor households

*Author for correspondence

 Self-Help Group and Socio-Economic Empowerment of Women in Rural India

have gained access to formal banking system. Ninety powerful instrument in alleviating poverty and empower-
percent of these groups are ‘only women’ groups. About ment of women in rural economy. They created awareness
400 women joins the SHG every hour and an NGO (Non- in self-employment, entrepreneurial development and
Government Organization) join the Micro-Finance well-being of women.
Programme every day. Several agencies provide bulk A study held that the NGOs in India played an inter-
funding to SHGs through NGOs. Nearly half a million mediary role to the Government in rural development2
of SHGs have been linked to banks over the years. Only and many SHGs in rural areas have improved the socio-
a handful of states have been linked, mostly in South economic conditions of the rural families. Banks with the
India for almost 60%. 42% in Andhra Pradesh, 12% in help of NGOs and SHGs can reach out the needy with a
Tamil Nadu, 11% in Uttar Pradesh and 9% in Karnataka. small amount of credit as loans without having the fear of
Growth rate of SHGs are low in the states like Rajasthan, non-performing assets. Another study also confirm that
Bihar, Uttar Pradesh, Madhya Pradesh, Orissa and Union SHGs through their network with commercial banks,
Territory of Andaman Nicobar Islands. SHGs have bene- co-operative banks, regional rural banks, NABARD
fited its members in many ways like income, employment and NGO’s have improved the financial services to the
opportunities for the women and also have enhanced the poor and uplifted their status in the society. Thus SHGs
equality of women as participants, decision-makers and are important to increase gainful employment3. A study
beneficiaries in the democratic, economic, social and about SHGs in India, observed that about 59% of the sam-
­cultural spheres of life. ple households registered an increase in assets and 47.9%
moved above the poverty line from pre-to-post SHG situ-
ation. Thus Social empowerment was evident in terms of
4. Objectives of SHGs improvements in members’ confidence level, treatment
within the family, communication skills and other behav-
• Alleviate poverty ioral aspects4. Three dimensions of women empowerment
• Empowering women namely economic, social and political was mentioned5.
• Developing leadership ability among rural women and Women have lesser decision making power in their day
poor to day life6. This situation is changing because of SHGs
• Encouraging saving habits among rural women and its micro enterprises. Another studystates that 60%
• Motivating women for taking up the responsibilities of the women take up economic activities related to agri-
culture and allied activities7. A systematic and planned
approach in bringing the positive imagery of women in
5. Socio-Economic Empowerment India was given in a study8. There was a huge improve-
of Rural Women in India ment in women’s control over their savings, credit and
income. NGOs also play equal role with the government
through SHGs agencies in improving the facilities for women9. There is
In Vedic period women enjoyed equal status and rights a positive function of banking habits through SHGs MF
with the males. But in medieval India women became the (Micro-Finance) programmes10. Development of sav-
inferior sex with the entrance of Muslims. During this ing habits among the rural people and poor, paving ways
period several evil practices like female infanticide, sati, for better technology and access to various promotional
Devadasi tradition and child marriage were in practice. assistance was identified11. Education and literacy rates
In-spite of some great-women rulers, position of women of women contribute hugely, and help women reach their
in India did not change. Women status got slightly uplifted full potencies and become empowered12.
in the modern era, during the British period. They intro- SHPIs (Self-Help Group Promoting Institutions) which
duced education system for women, which made the primarily include NGOs, banks, and Government officials
emergence of various female writers (womenempower- link poor with SHGs. This program arranges training,
[Link]). regular meetings, frequent loan repayment installments
Government of India had declared the year 2001 as and savings. Healthcare, basic literacy, family planning,
the “Women’s Empowerment Year”, with focus of women’s marketing and occupational skills are also included in this
equal status with their partners. SHGs grew to become a program13. Women are empowered and her ­bargaining

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 R. L. Vinodhini and P. Vaijayanthi

power of allocating resources within household is increased ­ icrofinance programme. SHG Bank Linkage Programme
m
by increasing her monetary income and the value of time14. (SHG-BLP) introduced by NABARD about two decades
Increase in monetary income leads her to invest in educa- ago, started from a pilot of linking 500 SHGs of rural poor
tion, housing and nutrition for children15. Frequent group has crossed 8 million groups. This programme claims
meetings organized by SHGs give women an opportunity group savings of ₹37,000 crores and credit outstanding
to break out of the daily routine and enable problem shar- of ₹51,545 crores. Thus this model has emerged as the
ing among themselves. This paves way for analysing the most successful model in the financial services. This sav-
root cause and go beyond the individual faults16. This group ing model is a successful empowerment tool which has
interaction creates a platform where personal problems are covered almost 10 crore households in the country. About
discussed as social patterns and the negative emotions may 86% of the groups are exclusively women groups, which is
be blamed on the environment than the self17. The interac- a big impetus to women empowerment. The SHG mem-
tion with women both within and with the other members bers have also learnt to become a good customer of banks
of the SHGs increases the confidence level and exposure to with the training given under this programme.
articulate and pursue her interests18. Better communication, As per the Socio Economic and Caste Census out
improved networking and greater mobility also contributes of more than 1794 lakh households in rural area, about
for women empowerment19. Social pressure on women 1337 lakh households are having a monthly income of the
have high impact in her decision making. Interaction of highest earning member of the households below ₹5,000.
SHPIs and SHGs encourages women to actively participate Which is about 75% of the total households. All these
in public activities, strengthen their ability to pursue their households seem to be in the economically backward and
interests in society and local politics20,21. Women are also underprivileged category. These households constitute the
empowered by the increase in female representation in potential segment of the SHG Bank Linkage Programme.
local governments22. Women’s empowerment is not just an Table 1 gives the progress of SHGs from 2012-13 to
outcome, but a process23,24. 2014-15. During 2014-15 about 2.68 lakh new SHGs were
Social status of women have changed and their eco- added, and the number of SHGs saving has raised to 76.97
nomic status have also improved25. Economic activities lakh. It is observed from the table that there is an increase
like income, expenditure and savings of SHGs are quite of 3.59% in the number of savings linked over the pre-
successful26. Micro credit check through SHGs plays a vious years, after a dip in 2012-13. The number of loan
major role in the overall development of rural women27. outstanding has gone up by 20%, against a 6% decline in
Women have creative ability, easy adaptability and ability the previous year.
to cope with setbacks. Table 2 gives the progress of Women SHGs from
2012-13 to 2014-15. The share of exclusive women SHGs
in the total number of SHGs linked to banks grew from
6. SHGs Current Position in India 84% to 86% (NABARD Report 2014-15).
The SHGs progress is steady in number since the launch. Figure 1 represents that almost one half (48%) accounts
The SHG programme in India is the world’s largest to the Southern region, followed by 20% in Eastern region.

Table 1. Overall Progress under SHG-Bank Linkage Programme (2012-2015)

(No. in Lakhs / Amt. in crore)
Particulars 2012-13 2013-14 2014-15 %Growth(2013-14) %Growth(2014-15)
No. Amt. No. Amt. No. Amt. No. Amt. No. Amt.
Savings of SHGs
73.18 8217.25 74.30 9897.42 76.97 11059.84 1.53 20.45 3.59 11.74
with Bank
Bank Loans
12.20 20585.36 13.66 24017.36 16.26 27582.31 12.02 16.67 19.03 14.84
Disbursed
Bank Loans
44.51 39375.30 41.97 42927.52 44.68 51545.46 -5.71 9.02 6.46 20.06
Outstanding
Source: State of microfinance in India (2014-15), NABARD

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 Self-Help Group and Socio-Economic Empowerment of Women in Rural India

Table 2. Progress of Women SHGs (2012-2015)

(No. in Lakhs / Amt. in crore)
Particulars 2012-2013 2013-2014 2014-2015 %Growth(2013-2014) %Growth(2014-2015)
No. Amt. No. Amt. No. Amt. No. Amt. No. Amt.
Savings of SHGs
59.38 6514.86 62.52 8012.89 66.51 9264.33 5.27 22.99 6.38 15.31
with Bank
Bank Loans
10.37 17854.31 11.52 21037.97 14.48 24419.75 11.02 17.83 25.69 16.07
Disbursed
Bank Loans
37.57 32840.04 34.06 36151.58 38.58 45901.85 -9.34 10.08 13.27 26.97
Outstanding
Source: State of microfinance in India (2014-15), NABARD

followed by RRBs. Cooperatives have about 18% of saving

linked SHGs with them.

7. Conclusion
SHGs have identified ways for women empowerment and
reduction of poverty. They have contributed by develop-
ing their social and economic status. They also empower
women by increasing their income, expenditure and sav-
ing habits.
The key reasons for the success of SHGs are its link
with the poor people, its innovative practices, its capacity
Figure 1. Distributions of SHGs Across Regions of India to enable people’s participation in development and trust
2014-15. building at different levels between stakeholders. SHGs
also help in the financial status of the households. They
Source: State of microfinance in India (2014-15), NABARD
have developed self-confidence and independence among
rural women, which in turn increased the livelihood of
Table 3. Agency-wise Distribution of savings in the rural people.
2014-15

Particulars
Commercial Regional Cooperative
Total
8. Limitations and Scope for
Banks Rural Banks Banks Future Study
Total 76.97 A study on non-member women may be undertaken and
41.36 (54%) 21.61 (28%) 14.00 (18%)
SHG (100%)
a comparative study may be much useful. Demographic
Women 66.52
36.02 (54%) 18.03 (27%) 12.37 (19%) factors can be included for showing the differences in their
SHG (100%)
performance. The study is limited to socio-economic in
Source: State of microfinance in India (2014-15), NABARD general, it can be further extended to individual factors.
The study is based on the secondary data available, pri-
The report also states that among Southern region; Tamil mary data is more helpful for further analysis.
Nadu has the maximum number (12.8%) of SHGs after
the split of Andhra Pradesh.
Table 3 represents that the Commercial Banks
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